Feb 202017
 

Last week the City of Sydney and councillor Jess Scully came under fire for an apparent backflip about the need for a Chief Digital Officer.

Scully, who was elected at last year’s council elections, told InnovationAus “the idea of a CDO or chief innovation officer seems a little bit redundant” a day before the organisation advertised for ‘chief, technology and digital services officer’.

To be fair to Scully, the roles being advertised by the City of Sydney were not truly CDOs in the way Brisbane, which has a small business focus, and Melbourne’s city councils have appointed them however it raises the question of whether Scully is right that an organisation doesn’t need a Chief Digital Officer.

As with most questions of this nature, the answer seems to be ‘it depends’. A key part of that discussion is where a CDO sits in an organisation. If they are senior executive or even board role, then it’s likely they are going to come into conflict with other c-suite managers such as the COO and CFO.

What’s worse, such a conflict in the c-suite can mean digital issues can be seen as ‘belonging’ to the CDO and not other key business units, which can only be to the detriment of the organisation.

There’s an argument too that the changes to organisations is so great from the changing economy and emerging technologies that responsibility of understanding and dealing with these changes is the role of the CEO and the board.

Where a CDO can be very effective is being an advocate for change and a trusted adviser to senior management, however even there risks lie as identified by Paul Shetler who found the siloing of agencies within the Australian Public Service meant it was very hard to effect any change in the face of resistance from an organisation’s vested interests.

It seems from the story that the City of Sydney has chosen an advocate and support role for the digital officer position, rather than formalise a CDO position who becomes a figurehead for the organisation’s digital evolution.

For a CDO or any technology advocate to be effective, there has to be support from the board and senior management. A technologist can only drive change if they have a mandate from the top.

Even then in some organisations the culture may be so factionalised that the response to change and drive for digital transformation has to come from the existing powerbrokers and a CDO could be at best a hindrance and even obstruct the process.

So the City of Sydney and Jess Scully aren’t wrong in not having a Chief Digital Officer, and neither are Melbourne and Brisbane for having one, it’s a deliberate decision by the various managements to choose the structure and roles that works best for their organisation. Driving change though always remains the responsibility of the board and the CEO they appoint.

Feb 032017
 

Last year the Committee for Economic Development, Australia (CEDA) warned over 40% of the nation’s jobs were at risk from automation over the next 15 years.

While that focus was on the risks to workers, it’s equally threatening for small business. Many companies and sole traders are facing the same disruptions from technological change.

This isn’t a new phenomenon, in the Twentieth century the motor car displaced thousands of small businesses that catered to the horse drawn economy and family run corner stores were displaced by the arrival of supermarkets in the 1950s.

Beyond the personal computer era

At the end of the last century the personal computer’s arrival revolutionised small businesses as suddenly tools that were previously only in the reach of big organisations were suddenly accessible to the most modest venture.

One of the early beneficiaries of that shift to desktop computers in 1990s was the bookkeeping industry which took off as a legion of home based contractors catered for local small businesses.

As the internet and smartphones came along, the bookkeeping market changed as features like bank feeds and receipt apps automated many previously manual tasks.

Despite those challenges the bookkeeping industry has survived and continues to grow with IBIS World estimating the overall accounting industry, which includes bookkeepers, grew 2.6% per year over the past five years.

Close to customers

The success of bookkeepers and accountants in navigating change is probably due to industry being close to their clients along with being early adopters of new technology, two things that caught the taxi industry out when Uber arrived.

Uber’s success in upturning the taxi industry illustrates just how important understanding emerging technologies is for smaller businesses. One industry currently facing massive disruption from robots is the construction sector.

The trades were thought to be relatively immune from automation – after all, who’s going to build a robot plumber? But now robots are moving into trades like bricklaying, as Australian startup Fastbrick Robotics shows.

Fastbrick are building a commercial bricklaying machine, Hadrian X, that automates the trade’s physical work and integrates with 3D printing technology.

In one respect the robot bricklayers are bad for the trade’s employment prospects but for older brickies with bad backs having a machine to help you is a godsend while for employers it improves productivity and reduces workplace accidents. It won’t be the end of the trade but the contractors who survive will have adapted to a very different construction industry.

Restructuring industries

That Fastbrick integrates with design software shows how the dynamics of the construction are changing. In 2014 Chinese company Winsun demonstrated how they can build ten houses in a day with large scale 3D printers.

While we may not see that particular technology in Australia, aspects of it will be used and they are going to change all the trades and professions related to the building industry.

Architects are one building industry group that have long dealt with technological change. Like bookkeepers, the arrival of personal computers completely changed their profession and those who adapted thrived.

Now with cloud computing services plugging into builders’ supply chains like Winsun and machines like Fastbrick’s, architects are closer than ever to the worksite and their customers. The ones who are adapting are the earlier adopters who are getting into these technologies further.

Disrupting the professions

Accountants and architects aren’t the only professions being affected, lawyers are facing a new wave of services using artificial intelligence to do many legal tasks ranging from a chatbot that appeals traffic fines to a program that predicts US Supreme Court decisions.

Like other sectors, it’s the early adopters in the legal sector who are adapting to a very different industry with much of the manual, lower level work being automated out.

The wave of technology we’re now seeing appear – including robots, autonomous vehicles, machine learning and artificial intelligence – are going to change our industries and workplaces dramatically in the next few years.

What the accounting industry and the architecture profession teach us is the businesses closest to their customers and those adopting technology early will be the ones who thrive in a very different industries. Researching, experimenting and paying attention will be the keys to business survival.

An open mindset

Even for the trades, survival during this wave of technological change will be a matter of watching the marketplace closely while being open to new methods and technologies.

Assuming it won’t happen to your industry is probably one of the riskiest things of all. Ten years ago the idea of smartphones revolutionising the taxi business or that robots could replace bricklayers was unthinkable. Now it’s almost expected.

The forces that are changing the workplace are also changing industries and markets, so small businesses will also be affected. It’s going to pay to be smart and curious.

Jan 232017
 

“You can’t kumbaya your way though it,” says Paul Shetler, the former head of Australia’s Digital Transformation Office, about the task of bringing an organisation or government into the 21st Century.

Shetler, who previously worked for the UK’s Government Digital Service (GDS) and Ministry of Justice, was reflecting on how a brutal approach to change was necessary when confronted by management resistance and a recalcitrant bureaucracy.

I had the opportunity to interview Shetler two weeks ago with part of that discussion being published on Diginomica. One of his key points is when driving a transformation, consensus is the first casualty.

“In the UK, we didn’t focus on consensus we focused on getting things done. When I first met with Francis Maud he said ‘this is not a change management process – this is transformation.’”

However to drive such change forcefully strong leadership is needed and Shetler emphasised that one of the great drivers for digital transformation at the UK’s Ministry of Justice was having a committed and powerful minister.

“One of the major reasons why the UK was a successful as they were was because Francis Maude was the minister for five years… It became clear he was going to see this through and if you were going to fight, you were going to lose. People got into line.”

Ultimately a lack of strong leadership is why the Australian DTO failed, with the country’s political culture seeing ministers rotated out of positions on a regular basis – the Innovation portfolio is seeing its fourth minister in 18 months  – it’s almost impossible for any leader, however forceful, to drive meaningful change.

This raises the question of whether some organisations can culturally handle change, it may well be that some institutions are impervious to change given the nature of their management structures and the people that lead them.

Australian taxpayers may hope that their public service isn’t an institution that resists change but Paul Shetler’s experience is a worrying warning.

Dec 122016
 

A scathing review of Google Home raises questions about the company’s ability to ship hardware and its executives’ commitment to consumer markets.

“I was so excited,” recalls Business Insider’s Ben Gilbert about the announcement of the revamped Google Home last may. Sadly, he found the device lacking integration with the rest of the company’s services and unreliable in connecting with his Wi-Fi network.

He returned the device and now vows to wait until “AI technology to improve dramatically.”

While Gilbert may wait, the market won’t with Amazon’s Alexa and Apple’s Siri cementing their market positions and a range of startups promising to change the market.

Google – or Alphabet’s – failure to execute with the Home product should worry shareholders as the company has shown it hasn’t been good at getting consumer devices to the market and the organisation’s notorious management attention deficit disorder seems to have crippled this device very early in its development, a far from good sign.

The Google Pixel smartphone shows the company is capable of shipping good products, but that commitment has to extend across all their hardware and consumer software products.

In highly competitive market with well cashed up and focused competitors like Amazon, Facebook and Apple, Google will have to ensure good products are shipped in their name. Substandard will not survive in this marketplace.

Dec 032016
 

“Like all great ideas it was conceived over a beer and executed over coffee,” says John Bishop, the joint founder and co-CEO of Pet Rescue. “A couple of friends and I were sitting in a bar back in 2003 and we came up with the idea, had a look around and there was no-one doing it in Australia at the time.”

John was talking to Decoding the New Economy at last week’s AWS Re:Invent conference in Las Vegas where he some time to explain how Pet Rescue uses the web to connect prospective pet owners with rescue shelters.

“Basically we help people find rescue pets in need of adoption,” John explains. “We work with the vast number of rescue groups in Australia. By rescue groups I mean pounds, shelters, vet clinics and foster care networks. There’s about 950 of those in Pet Rescue at the moment.”

Rabbits, guinea pigs and rats

The system allows accredited animal rescue services to list the pets they have available for adoption, “primarily cats and dogs but also rabbits, guinea pigs, pigs, chickens, there’s even one rat we’ve rehomed,” John laughs.

John was working as an IT manager with a consulting business on the side in 2004 when the site launched. “We didn’t know if it would work but I had the idea in my head the whole time I was building it that if one pet found a home rather than being killed then it would be worthwhile.”

“From day one I designed Pet Rescue to be as hands off as possible, once the members had access to it they could upload their own photos and things like that. It wasn’t groundbreaking in 2003 but it wasn’t that common”

“One of the biggest problems we faced in those early days was many of the rescue groups didn’t have digital cameras. So we did a promotion with a bunch of Kodak digital cameras that had been donated to us and gave them to the groups.”

A problem of scale

The site was quickly a success but that came with issues, particularly when the site was mentioned in the press or had a lot of social media attention. “Eventually we hit problems as I had gave no thought of architecting a site that would scale.”

While that scaling process didn’t go without problems, the service now sits in the public cloud with AWS so the Pet Rescue team can get on with connecting pets with owners, and John expects to help rehouse four thousand pets by the end of the year.

“Our challenge at the moment is we have a weird supply and demand problem happening, we have half a million unique visitors a month and helping rehome about five to six thousand. Another challenge is we’re still working on an old model of handling enquiries about the pets.”

“Our goal is to get to the point where we rehome 200,000 pets a year. Right now we’re looking at 90,000. It’s a bit of a magic number because that’s the number of pets that are unnecessirly killed each year so if we can get to that two hundred thousand we can zero that out.”

Finding funding

The bigger task for Pet Rescue is to find funding with the organisation as John doesn’t believe paid registration for the rescue groups or users is the best thing for the site, “we want to have as few barriers as possible,” he says.

Currently the service earns some money from advertising with some corporate partnerships in the pipeline. “We need money, it costs a lot to keep the site up and costs a lot for development.”

While many startups and corporations talk about using tech for good, Pet Rescue’s and John Bishop’s mission of ending unnecessary deaths of unplaced pets is a genuine worthy cause. By making it easier for companion animals to be adopted by the right households shows what technology can do.

Paul travelled to Las Vegas and the Re:Invent conference as a guest of Amazon Web Services.

Dec 022016
 

One of the biggest impressions from the AWS Re:Invent conference is the company’s rapid innovation with the firm’s executives boasting how they have offered over a thousand features on their services this year.

That sort of rapid change requires a fairly tolerant attitude towards new ideas and risk, which was something AWS CEO Andy Jassy explained at the media briefing.

“In a lot of companies as they get bigger, the senior people walk into a room looking for ways to say ‘no’. Most large organisations are centrally organised as opposed to decentralised so it’s harder to do many things at once,” he observed.

“The senior people at Amazon are looking at ways to say ‘yes’. We don’t say ‘yes’ to every idea, we rigorously assess each on its merits, but we are problem solving and collaborating with the people proposing the idea so we say ‘yes’ a lot more often than others.”

“If you want to invent at a rapid rate and you want to push the envelope of innovation, you have to be unafraid to fail,” he continued. “We talk a lot inside the company that we’re working on several of our next big failures. Most of the things we do aren’t going to be failures but if you’re innovating enough there will be things that don’t work but that’s okay.”

While Amazon’s management should be lauded for that attitude, they are in a position of having tolerant investors who for the last twenty years haven’t been too fussed about the company’s profits. Leaders of companies with less indulgent shareholders probably can’t afford the same attitude towards risk.

There’s also the nature of the industry that AWS operates which is still in its early days, sectors that are far more mature or in declines – such as banking or media respectively – don’t have the luxury of saying ‘yes’ to as many ideas as possible.

Jassy’s view about encouraging ideas in the business is worth considering for all organisations though. With the world changing rapidly, having a workforce empowered to think about new ideas is critical for a business’ survival.

Nov 172016
 

Then the robots came for the wealth managers…

While much of the focus on the effects of automation in the workforce falls upon manual, skilled and lower level clerical jobs, much of the impact of the next wave of automation will fall on higher level roles.

The rise of the robot financial advisor is a good example of this, as Finextra reports, Well Fargo bank has teamed up with fintech startup SigFig to automate wealth management.

Wealth management has been a lucrative field for banks in recent years however it has come with a reputational risk as poorly trained, incompetent or unethical advisors have pushed customers into investments more aligned with the staffs’ commission structures than the clients’ interests.

Given the costs and risks of employing well paid financial advisors, it’s understandable banks would be attracted to automating the function.

The problem for the banks is automated tools will commoditise the marketplace and almost certainly drive down margins.

So, along with the well paid jobs, the river of gold that was wealth management dries up for the banking sector.